Arkansas Corporation Provided the Following Information Regarding Its Only Product--Tables

question 123

Multiple Choice

Arkansas Corporation provided the following information regarding its only product--tables: $$\begin{array} { l r } \text { Selling price per unit } & \$ 65 \\\text { Direct materials used } & 150,000 \\\text { Direct labor } & 225,000 \\\text { Variable factory overhead } & 140,000 \\\text { Variable selling and administrative expenses } & 60,000 \\\text { Fixed factory overhead } & 370,000 \\\text { Fixed selling and administrative expenses } & 30,000 \\& \\\text { Units produced and sold } & 20,000\end{array}$$ Assuming there is excess capacity, the effect of accepting a special order for 1,000 units at a price of $40.00 per table is that net income would _____.

• A)increase by $40,000
• B)increase by $11,250
• C)decrease by $28,750
• D)decrease by $10,000

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